Li Peng's Economic Message: Beijing Needs the World
International Herald Tribune
May 12, 1994
Jonathan Gage and Kevin Murphy 

Just a year ago it would have been all but unthinkable.

Prime Minister Li Peng, giving a dinner for major foreign corporate leaders and several hundred of their guests in the Great Hall of the People, asked Wednesday for money, technology and management skills to help build China's economy.

"To accomplish our objectives, we need the cooperation and support of the rest of the world," Mr. Li said. "At the same time, we're lacking funds for investment."

Earlier, in his private reception room, surrounded by members of China's State Council and other high officials, Mr. Li treated just the business leaders to an hourlong off-the-cuff assessment of the state of his country.

The tea, overstuffed armchairs and moist face-towels were familiar to frequent visitors at China's seat of government. But calling in a group of some of the world's ranking capitalists for a confident and yet frank-sounding explanation of China's problems and promise was something quite new for the Chinese government, according to local and foreign officials and businessmen.

"We need the world and the world needs China," Mr. Li said in his address in the building at Beijing's Tiananmen Square. "The world needs to understand China and China needs to understand the world."

It was a message often repeated at a hotel across town Wednesday, where a two-day conference co-sponsored by the government and foreign business got off the ground.

The conference - dubbed "The 1994 China Summit" - brought together more than 500 foreign and Chinese corporate leaders and government officials to discuss the role of foreign business in what China calls its socialist market economy.

The gathering, Chinese officials emphasized, was the first in which the country's most senior leaders have mingled and exchanged views directly with hundreds of foreign and local business people and diplomats, as well as with lower-ranking Chinese officials from whom they otherwise remain distant.

Beijing views the conference as a means of reaching out to foreign business to finance its rapidly evolving program of economic reforms. The event comes at a time when China's banking, securities markets and taxation systems are being rebuilt along more capitalist lines and its money-losing state-HL owned industries are being forced to compete in a market economy.

"1994 is a critical year in the process of restructuring our nation's economy," said Wu Jie, vice chairman of China's State Commission for Restructuring the Economic Systems. The commission, which is overseeing China's ambitious economic transformation, organized the conference along with the International Herald Tribune.

"This has been the year we have attacked the most difficult issues," said Gao Shangquan, a leading reform economist. "We are at a crucial stage of our reforms and it is important that so many foreign participants have come to present their views."

Despite major challenges in controlling inflation and slowing growth, China remains determined to intensify its economic reform process and further open itself to international trade and investment, according to remarks by leading figures in Beijing's economic reform movement.

But at the same time, officials made clear that China sought to develop its own model for development - on its own terms.

The twin mantras of socialist market economy and "building socialism with Chinese characteristics" were often repeated as China qualified its plans to place a still-greater share of the national destiny in the hands of free market forces and a rising class of Chinese entreprenuers.

Corporate hosts and executives who met with Mr. Li included Percy Barnevik, president and chief executive of ABB Asea Brown Boveri Ltd.; Ronald B. Woodard, president of Boeing Commercial Airplane Group; Patrick J. Ward, chairman and president of Caltex Petroleum Corp., and Philip Tose, chairman of Peregrine Investments Holdings.

Conference participants include China's minister of finance, Liu Zhongli, and minister of foreign trade, Wu Yi; State Councilor Li Tieying, the official in charge of restructuring China's state enterprises and economy; the former West German Chancellor, Helmut Schmidt; the director-general of the General Agreement on Tariffs and Trade, Peter D. Sutherland; Ernest Stern, managing director of the World Bank, and Malaysia's prime minister, Mahathir bin Mohamad.

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